Health care pros still struggling to sort out ACA

Vladimir St. Phard, the president of Customized Benefit Solutions, emphasizes the need for employees to be honest and up front with their employees about health care changes. - (AARON HOUSTON)

David Oscar, an insurance broker for the Altigro Financial Group in Fairfield, was certain one of his clients was going to benefit from the Affordable Care Act with a generous subsidy.

Oscar was so confident, in fact, that when he was unable to access the Healthcare.gov site in October, he helped his client — a 57-year-old female entrepreneur who makes just $16,000 a year — fill out a paper application.

The hope was to drop her premium from $716 a month to just $408 — or "less than she is paying now."

Last week, the government told her she's not getting any subsidy money at all.

"There is no way she is not entitled to a subsidy," Oscar said, joining an ever-growing group of people frustrated with Obamacare.

"This is insanity," he said. "And it's not getting any better."

All it's getting, it seems, is more complicated and confusing.

A week after the site was said to be "performing well" and two months after Obamacare officially launched, NJBIZ talked to Oscar and three other people in the industry.

All expressed frustration of some sort or another. Here are their stories:

Vladimir St. PhardPresident, Customized Benefit Solutions

Employers are now getting their 2014 health plan renewals; St. Phard said those with fewer than 50 employees are coping with a dramatic change in how their plans are priced.

For the first time, insurers are quoting premiums for each employee, with prices varying widely by age and whether the employee has a spouse or children. In the past, insurers quoted composite premiums by category, so all singles got the same premium, and all families were priced the same.

Under this new system, "a single person who is 50 years old may get a rate of $800 a month, and they're going to be working beside someone who is 30 and has the exact same health insurance plan that costs $300 a month," St. Phard said. "This is causing all kinds of issues for employers. We are advising employers to wrap your arms around the employees and inform them of what is going on."

In the past, many employers contributed a flat amount toward each employee's premium. But with older workers and families hard hit in 2014, some employers are tweaking that formula. St. Phard said one of his clients will increase the company's contribution by 10 percent for workers under age 40, and by 20 percent for those over 40.

Another employer started out with no intention of upping its contributions — then the company saw the huge increases hitting workers.

"Now they are trying to figure out how we can skin the cat so none of us are hurt really badly, and we all take the hit together," St. Phard said.

He said employers are dealing with this now, and companies that have to compete for the best employees will be more generous; but those that don't "will make the decision based on cost."

Christine StearnsVice president of health and legal affairs, New Jersey Business and Industry Association

Members are reacting negatively to the new rating system, especially those with an older workforce, Stearns said.

If employers stick with their traditional methods of subsidizing worker premiums, "that would hit older workers very hard, and that doesn't strike employers as fair," she said. "Employers have to figure out and rethink their approach to the employee share."

She said in small companies, the human resources professional "sits down with each employee to help them make the best choice" among the various health plans available.

"(It is) amazing how much time and energy small employers spend (on health care)," she said.

Stearns reached out to employers for comments, and she got an earful.

"People were staying late at the office to tell me how frustrated they are," she said.

Cirianni said small employers who renewed their old health plans early, by mid-December of 2013, are able to postpone the transition to the ACA for a year.

"It buys them 12 months to not have to deal with what appears to be a lot of confusion (generated by the ACA)," he said.

For some clients, this made financial sense.

"The premium increases were not as dramatic, and they have another year to let the dust settle," Cirianni said.

About 20 percent of his clients opted to renew early, but most employers are moving ahead with the new ACA plans — and trying to figure out how to deal with premium spikes hitting their workers.

"It is definitely going to impact the culture of the company, depending on how the business owner responds," Cirianni said.

Since employers probably can't absorb a 40 percent increase in the worker's premium, Cirianni said one option is redesigning the health plan.

"A lot of businesses still do not offer high-deductible health plans (that offer lower premiums)," Cirianni said. So now employers are being forced to "look at the opportunities out there to redesign their plans."

E-mail to: beth@njbiz.comOn Twitter: @bethfitzgerald8

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Beth Fitzgerald

Beth Fitzgerald reports on health care, small business and higher education. She joined NJBIZ in 2008 after a 34-year career at the Star-Ledger and has been reporting on business in New Jersey since 1978. Her email is beth@njbiz.com and she is @bethfitzgerald8 on Twitter.

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